EU seeks agreement on Russian fuel price caps

BRUSSELS: EU member states looked to reach a deal on Friday on price caps for Russian petroleum products, ahead of an embargo set to go into force over the weekend.

The move is the latest part of an international push to curb Russian President Vladimir Putin’s war chest for his assault on Ukraine by targeting his key exports.

The EU in December imposed an embargo on Russian crude oil coming in by sea and – together with its G7 partners – set a $60 dollar-per-barrel cap for exports around the world.

Now a second EU-wide embargo is set to come into force on Sunday targeting Russian refined oil products such as petrol, diesel and heating fuel, arriving on ships.

At the same time, the EU and the G7 group of wealthy democracies have also agreed to impose a price cap on Russian shipments of those products to global markets.

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The 27-nation EU is now haggling over proposals from its executive arm to set a $100-per-barrel limit on more expensive products like diesel and $45 on cheaper products like fuel oil.

The price caps work by establishing a ceiling for the cost of fuel that can be transported on EU ships.

Diplomats said Poland and the Baltic states, which have taken the most hawkish stance in the EU on Russia sanctions, have been pushing for the price to be lowered to further curb Moscow’s income.

But setting the levels is a sensitive issue as the West does not want to cut off Russian supplies to global markets entirely and send prices soaring.

The Kremlin lashed out at the EU ahead of the Sunday embargo coming into force, insisting it will “lead to a further imbalance of the international energy markets”.

“We are taking measures to hedge our interests against the risks associated,” Kremlin spokesman Dmitry Peskov told reporters.

Moscow’s war in Ukraine has provided a harsh wake-up call for the EU, which for years had been reliant on cheap fossil fuels from Russia to power its industries.

Brussels says the embargo on crude oil has seen the bloc cut out some 90 percent of Russian imports, after exceptions were granted for supplies flowing by pipeline to landlocked countries like Hungary.

EU chief Ursula von der Leyen on Thursday estimated during a visit to Kyiv that the existing price cap on Russian oil was already costing Moscow around 160 million euros ($175 million) every day.